Lenders are increasing fixed rates....again

Following the wave of increases in fixed rates across many bank a couple of months ago, another round of increases in fixed rates is in full swing.

CBA announced yesterday for the second time in just three weeks that it was increasing its fixed rates across both owner occupier and investor loans. This is the fifth time CBA has increased rates since November. This follows Westpac, ANZ, Bank of Melbourne and ING (to name a few) who have all increased their fixed loans in February.

Prior to February, many customers felt that they had missed the boat in locking in a fixed rate when the most competitive fixed rate was sitting at 1.89%. However, with this next round of increases in fixed rates, many home loan customers are having to reconsider whether they should try to lock in one of the current fixed rates before they move again.

It is a widely held belief, albeit speculative, that the Reserve Bank will start to life the cash rate sometime between August and the end of the year. Previously, this increase was thought to be closer to 2024.

However, even no recent changes to the cash rate, the banks are already moving. Banks are not tied to the decisions of the Reserve Bank; a bank can lift its interest rates at any time. We are seeing this happen right now.

Which leads to the question. Is it therefore the time to chase - and then lock in - the lowest fixed rate you can find in the market? For many customers the answer is yes. However, before you do, it is important to consider the implications that come with fixing your home loan rate. There are pros and cons of fixing your rate.

The best way to find out if you should be making the move now is to speak to your broker. More importantly have that conversation now.